The first recommendation is to develop two- to four-unit buildings into scattered site affordable housing with shallow LITHC subsidies, and offer up all for deed-restricted purchase after 15 years. Case studies show that the LIHTC subsidy is often very successful in renovating scattered site housing in weaker markets, partially because the shallow subsidy of LIHTC developments (50%-60% AMI) are received more positively than the deeper subsidy of Section 8 vouchers (Thomas & Dewar, 2013). Viewed not as a substitute but a complementary development strategy, LIHTC development could add income diversity to the neighborhood that hopefully would counteract the negative connotation that affordable housing has. Affordability would be viewed in relation to the resident. The opportunity to purchase houses (or individual units) through a limited-equity co-op would encourage greater resident stability and provide an opportunity for building wealth
The second recommendation is to develop two- to four-unit buildings into scattered site affordable housing through the 203(k) loan program, and making them available for purchase. These units would be restricted to households at or below 80% AMI, and like the LIHTC program, would provide a more shallow (supply-side) subsidy that should be positioned as complementing existing affordable housing options. If the program allows, the units could also be sold as limited-equity co-ops. Use of the 203(k) program for rental housing is only available, however, to a non-profit developer.